Udall Presses VA to Not Penalize Veterans Who Lost Homes in Colorado Wildfires on Mortgage, Refinancing Fees

WASHINGTON, D.C. – July 25, 2013 – (RealEstateRama) — Mark Udall, who serves on the U.S. Senate Armed Services Committee, urged the U.S. Department of Veterans Affairs in a letter today to reimburse financing fees charged for VA-backed home loans to veterans who lost their homes in the Waldo Canyon and Black Forest Fires. Udall sent the letter after learning of a constituent who paid thousands of dollars in non-reimbursable fees for a VA-backed home refinance loan only to lose his home a few months later in the Black Forest Fire. Under current policy, he and other VA beneficiaries may be required to pay additional fees when using a VA loan to purchase a replacement home.

“Veterans who lost their homes in Colorado’s recent devastating wildfires have already suffered significant financial and personal losses. Reimbursing their home financing fees will help them get back on their feet without undue out-of-pocket costs,” Udall said. “The Department of Veterans Affairs should acknowledge the unique circumstances of the veterans and service members who lost their homes and possessions in these wildfires and refund some or all of these financing fees. I know the VA is dedicated to helping veterans, and this common-sense and humane step is the least we can do to help the current and former troops in our community.”

“For the large majority of fire victims, homeowner insurance policies covered the financial losses related directly to the destruction of their homes. However, homeowners who had recently purchased or refinanced their homes with VA-backed mortgages have informed me that they have essentially forfeited the fees associated with those loans,” Udall wrote in the letter. “Further, some of those veterans who intend on purchasing new homes with VA-backed mortgages have been informed that they will be subject to additional fees.”

I write to ask for the Department of Veterans Affairs’ (VA) help in assisting the Colorado service members and veterans who have lost their homes to the wildfires that have devastated our state over the last two summers. The 2012 Waldo Canyon fire and the 2013 Black Forest fire destroyed nearly 850 residences and impacted thousands of families. As you know, the neighborhoods that were lost in those historic disasters were home to a large number of current and former service members whose homes were purchased with VA-backed loans.

For the large majority of fire victims, homeowner insurance policies covered the financial losses related directly to the destruction of their homes. However, homeowners who had recently purchased or refinanced their homes with VA-backed mortgages have informed me that they have essentially forfeited the fees associated with those loans. Further, some of those veterans who intend on purchasing new homes with VA-backed mortgages have been informed that they will be subject to additional fees.

For example, one of my constituents in Black Forest lost his home only five months after paying non-reimbursable VA refinancing fees. During the process of purchasing a new home, he was informed that there will be an additional fee associated with the new VA-backed mortgage for his replacement home. Due to the large population of VA beneficiaries in the fire zone, it is certain that other veterans are experiencing similar situations.

As such, I am requesting that you authorize the prorated reimbursement of financing fees charged for VA-backed home loans and mortgages for homes destroyed in the Waldo Canyon and Black Forest fires. I would also ask that you establish and appropriately publicize an application process for such reimbursements and give strong consideration to approving reimbursements for other VA beneficiaries affected by natural disasters. I believe this good-faith action would have negligible financial impact on the VA budget but would be enormously beneficial for many veterans who have already suffered enormous financial and emotional losses in the wake of these disasters.

I look forward to working with you in this important effort, and as always, you have my deepest thanks for your many years of service to our country and our veterans.

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